Trustee Paul Gresk had claimed Texas-based Leland Medical Center Inc. "raped" Winona by fraudulently transferring more than $4 million out of Winona to Leland.
U.S. Bankruptcy Court Judge Bill Parker ruled that Gresk had failed to produce sufficient evidence on that claim, and dismissed it. But, he said, he "actually does believe the truth of the underlying story about [Leland's] insidious self-serving management of [Winona]," according to a transcript of Parker's comments.
"There is reason to suspect that the cash distribution from [Winona] to Leland [was] based more on Leland's need for cash than concern about the impact of its activities on the financial viability of the Indianapolis hospital," Parker continued. "But, that said, suspicion and innuendo [are] not a substitute for proper pleading and substantive evidence in this context."
Leland owned Winona from 2002 to 2004 and sold it to a group of doctors. Winona went bankrupt and closed in September 2004.